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Compute for Net VAT Payable on VAT “inclusive” Sales/Receipts: Total Value Sales (VAT inclusive) = Php 127,000.00Total Purchase with VAT receipts (VAT inclusive) = Php 58,000.00a.Php 7,392.86b.Php 7,372.85c.Php 7,382.85d.Php 7,392.85

Question

Compute for Net VAT Payable on VAT “inclusive” Sales/Receipts: Total Value Sales (VAT inclusive) = Php 127,000.00Total Purchase with VAT receipts (VAT inclusive) = Php 58,000.00a.Php 7,392.86b.Php 7,372.85c.Php 7,382.85d.Php 7,392.85

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Solution

To compute for the Net VAT Payable on VAT “inclusive” Sales/Receipts, follow these steps:

  1. Compute for the VAT of the Total Value Sales and Total Purchase.

    The VAT rate in the Philippines is 12%, but since the amounts given are VAT-inclusive, we need to divide by 1.12 to get the VAT-exclusive amount, and then subtract this from the original amount to get the VAT.

    For the Total Value Sales: VAT = Php 127,000.00 / 1.12 = Php 113,392.86 VAT Sales = Php 127,000.00 - Php 113,392.86 = Php 13,607.14

    For the Total Purchase: VAT = Php 58,000.00 / 1.12 = Php 51,785.71 VAT Purchase = Php 58,000.00 - Php 51,785.71 = Php 6,214.29

  2. Subtract the VAT of the Total Purchase from the VAT of the Total Value Sales to get the Net VAT Payable.

    Net VAT Payable = VAT Sales - VAT Purchase Net VAT Payable = Php 13,607.14 - Php 6,214.29 = Php 7,392.85

So, the answer is d. Php 7,392.85.

This problem has been solved

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